FORTUNE REAL ESTATE INVESTMENT TRUST Adviser Immediately

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FORTUNE REAL ESTATE INVESTMENT TRUST Adviser Immediately THIS CIRCULAR IS IMPORTANT AND REQUIRES YOUR IMMEDIATE ATTENTION If you are in any doubt as to any aspect in this Circular or as to the action to be taken, you should consult your stockbroker, bank manager, solicitor, accountant or other professional CIRCULAR DATED 28 August 2013 CIRCULAR DATED INVESTMENT TRUST REAL ESTATE FORTUNE adviser immediately. If you have sold or transferred all your units in Fortune REIT, you should at once hand this Circular, together with the Notice of Extraordinary General Meeting and the accompanying form of proxy, to the purchaser or transferee or to the bank, licenced securities dealer or other agent through whom the sale or transfer was effected for transmission to the purchaser or transferee. Singapore Exchange Securities Trading Limited takes no responsibility for the accuracy of any statements or opinions made, or reports contained, in this Circular. The Securities and Futures Commission of Hong Kong, Hong Kong Exchanges and Clearing Limited, The Stock Exchange of Hong Kong Limited and Hong Kong Securities Clearing Company Limited take no responsibility for the contents in this Circular, make no representation as to its accuracy or completeness and expressly disclaim any liability whatsoever for any loss howsoever arising from or in reliance upon the whole or any part of the contents in this Circular. CIRCULAR DATED 28 August 2013 FORTUNE REAL ESTATE INVESTMENT TRUST (constituted in the Republic of Singapore pursuant to a trust deed dated 4 July 2003 (as amended) and authorised as a collective investment scheme under section 286 of the Securities and Futures Act, Chapter 289 of Singapore) (a collective investment scheme authorised under section 104 of the Securities and Futures Ordinance (Chapter 571 of the Laws of Hong Kong)) (Stock Code: Singapore: F25U and Hong Kong: 778) Managed by Asset Management (Fortune) Limited (1) MAJOR ACQUISITION AND CONNECTED PARTY TRANSACTIONS RELATING TO THE PROPOSED ACQUISITION OF THE KINGSWOOD GINZA PROPERTY, CONTINUING CONNECTED PARTY TRANSACTIONS AND RELATED MATTERS; AND (2) EXTRAORDINARY GENERAL MEETING AND CLOSURE OF REGISTER OF UNITHOLDERS Joint Lead Managers and Underwriters to the Unit Placement Important Dates and Times for Unitholders Record date for EGM : 11 September 2013 (Close of business) Latest date and time for lodgement of Proxy Form : 14 September 2013 at 11:00 a.m. Date and time of EGM : 16 September 2013 at 11:00 a.m. Place of EGM : Level 5, Hutchison House, 10 Harcourt Road, Central, Hong Kong (via video conference – Room 326, Level 3 Suntec Singapore Convention & Exhibition Centre, 1 Raffles Boulevard, Suntec City, Singapore 039593) The Proposed Acquisition Fortune REIT proposes to acquire Kingswood Ginza Property in Hong Kong. Kingswood Ginza Mall is the largest shopping mall in the Yuen Long District. Kingswood Ginza Property Location Tin Shui Wai, Yuen Long, New Territories Gross Rentable Area (excluding parking lots and ancillary space) 665,244 sq.ft. Number of parking lots 622 Occupancy rate (as at 30 June 2013) 95.5% Monthly rental per leased sq.ft. (as at 30 June 2013) HK$27.4 Consideration HK$5,849 million Appraised values (as at 30 June 2013) HK$5,858 million (by JLL) HK$5,850 million (by Savills) Legend Kingswood Ginza Property Existing Properties MTR & Light Rail Kingswood Ginza Property New Territories 2 9 6 16 15 10 1 5 12 Kowloon 11 14 13 3 4 8 7 Lantau Island Hong Kong Island THIS CIRCULAR IS IMPORTANT AND REQUIRES YOUR IMMEDIATE ATTENTION If you are in any doubt as to any aspect in this Circular or as to the action to be taken, you should consult your stockbroker, bank manager, solicitor, accountant or other professional adviser immediately. If you have sold or transferred all your units in Fortune REIT, you should at once hand this Circular, together with the Notice of Extraordinary General Meeting and the accompanying form of proxy, to the purchaser or transferee or to the bank, licenced securities dealer or other agent through whom the sale or transfer was effected for transmission to the purchaser or transferee. Singapore Exchange Securities Trading Limited takes no responsibility for the accuracy of any statements or opinions made, or reports contained, in this Circular. The Securities and Futures Commission of Hong Kong, Hong Kong Exchanges and Clearing Limited, The Stock Exchange of Hong Kong Limited and Hong Kong Securities Clearing Company Limited take no responsibility for the contents in this Circular, make no representation as to its accuracy or completeness and expressly disclaim any liability whatsoever for any loss howsoever arising from or in reliance upon the whole or any part of the contents in this Circular. FORTUNE REAL ESTATE INVESTMENT TRUST (constituted in the Republic of Singapore pursuant to a trust deed dated 4 July 2003 (as amended) and authorised as a collective investment scheme under section 286 of the Securities and Futures Act, Chapter 289 of Singapore) (a collective investment scheme authorised under section 104 of the Securities and Futures Ordinance (Chapter 571 of the Laws of Hong Kong)) (Stock Code: Singapore: F25U and Hong Kong: 778) Managed by (1) MAJOR ACQUISITION AND CONNECTED PARTY TRANSACTIONS RELATING TO THE PROPOSED ACQUISITION OF THE KINGSWOOD GINZA PROPERTY, CONTINUING CONNECTED PARTY TRANSACTIONS AND RELATED MATTERS; AND (2) EXTRAORDINARY GENERAL MEETING AND CLOSURE OF REGISTER OF UNITHOLDERS Joint Lead Managers and Underwriters to the Unit Placement Independent Financial Advisers to the Independent Board Committee and the Audit Committee of the Manager, the Independent Unitholders and the Trustee (in its capacity as the independent financial adviser for the purpose of (in its capacity as the independent financial adviser for the purpose of Chapter 9 of the Singapore Listing Manual) paragraph 10.10(p) of the Code on Real Estate Investment Trusts) A letter to the Unitholders is set out on pages 24 to 79 of this Circular. A notice convening the EGM to be held at 11:00 a.m. on 16 September 2013 at Level 5, Hutchison House, 10 Harcourt Road, Central, Hong Kong is set out on pages N-1 to N-3 of this Circular. Any Unitholder or depositor or proxy who wishes to take part in the EGM from Singapore, may attend via video conference which shall be held at Room 326, Level 3 Suntec Singapore Convention & Exhibition Centre, 1 Raffles Boulevard, Suntec City, Singapore 039593. Whether or not you are able to attend and vote at the EGM in person, please complete and return the accompanying form of proxy to: (a) the Singapore Unit Registrar, Boardroom Corporate & Advisory Services Pte. Limited, at 50 Raffles Place #32-01, Singapore Land Tower, Singapore 048623 (for Singapore Unitholders); or (b) the Hong Kong Unit Registrar, Computershare Hong Kong Investor Services Limited, Rooms 1712-1716, 17th Floor, Hopewell Centre, 183 Queen’s Road East, Wanchai, Hong Kong (for Hong Kong Unitholders) in accordance with the instructions printed thereon as soon as possible and in any event not less than forty-eight (48) hours before the time appointed for the holding of the EGM or any adjournment thereof. Completion and return of the form of proxy will not preclude you from attending and voting in person at the EGM or any adjournment thereof should you so wish. 28 August 2013 TABLE OF CONTENTS Page CORPORATE INFORMATION ................................................. 1 DEFINITIONS ............................................................. 5 SUMMARY .............................................................. 17 INDICATIVE TIMETABLE .................................................... 23 LETTER TO THE UNITHOLDERS .............................................. 24 1. Introduction ......................................................... 24 2. The Transaction ...................................................... 25 3. Reasons and Benefits .................................................. 38 4. Financing of the Acquisition ............................................ 39 5. Information on the Kingswood Ginza Property ............................. 42 6. Financial Effects of the Transaction and the Unit Placement .................. 49 7. Risk Factors .......................................................... 52 8. Connected Party Transactions, Interested Party Transactions and Interested Person Transactions as a result of the Transaction ................ 55 9. New Continuing Connected Party Transactions ............................. 57 10. Implications under the REIT Code and the Trust Deed ....................... 68 11. Implications under the Singapore Listing Manual and the Singapore Property Funds Appendix ................................. 72 12. Recommendations .................................................... 75 13. Responsibility Statements of the Manager and the Directors .................. 78 14. Responsibility Statements of the Joint Lead Managers and Underwriters ........ 78 15. Extraordinary General Meeting and Closure of Register of Unitholders ......... 78 16. Additional Information ................................................ 79 LETTER FROM THE INDEPENDENT BOARD COMMITTEE AND THE AUDIT COMMITTEE . IBC-1 LETTER FROM THE INDEPENDENT FINANCIAL ADVISERS .......................... IFA-1 Appendix 1 : Financial Information of Fortune REIT .......................... A1-1 Appendix 2 : Accountants’ Report in respect of the Target Company ........... A2-1 Appendix 3 : Pro Forma Financial Information of the Enlarged Group ........... A3-1 Appendix 4 : Independent Property Valuers’ Property
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